Considerations for Migrating to the Cloud:
How Cloud Computing is Changing the Enterprise
by Martin Jones and Christian Sarkar
The Business View
Enterprises around the world have invested billions of dollars in technology, hoping to improve their execution capability, drive productivity, improve profitability and attain sustained competitive advantage. Some have been more successful than others in getting the expected returns from their technology investments but few, if any, have been able to realize the full potential of their investments. In fact, with time many enterprise IT organizations have grown in complexity as well as in size and are proving to become quite unmanageable - a drain on their business margin structures and some are even viewed as inhibitors for supporting the ever changing needs of business.
More and more this is a view we see echoed in executive suites across the world the US, Europe, and Asia-Pacific.
With the advent of cloud computing and the timing of the global recession, IT is being asked to "lead or get out of the way."
A recent report from Deloitte, CFO Insights: Heading for the Clouds, makes the case that since the IT budget is often one of the largest expenses a company incurs, CFOs should ask their CIOs how they plan to leverage cloud computing to reduce costs and increase service responsiveness. Specifically, the CFO should ask:
- Is there a strategy to use cloud computing as part of the IT services mix?
- What areas create the greatest opportunities for savings now?
- What applications will be migrated to the cloud?
The report does raise two of IT's favorite concens: security and vendor lock-in, but brushes them off effectively:
Generally, the level of computer security, data privacy practices and the expertise of major cloud service providers are likely to be greater than those provided by an in-house IT staff and systems. This makes the security concern less salient. Nevertheless, before moving data and applications to a cloud it is important to ensure the cloud provider has strong security and privacy policies in place.
In our experience, the cloud lock-in issue is fast becoming a non-issue for several key reasons:
- business executives feel that they are already locked in by internal IT and the legacy vendors in the IT data-center
- the immediate need for new business capabilities and agility of cloud implementations outweigh the lock-in doom and gloom scenario painted by IT
- the financial aspect of cloud computing - "pay per use" - thus moving fom capex to opex for IT investments - is an overwhelming advantage for many CFOs
This business view leaves IT executives with a real dilemma: how can IT support the business when the business doesn't want IT support? (We discuss this dilemma at the very end of this article.)
Migrating to the Cloud: Implementation Considerations
The cloud migration exodus has begun. For many, the benefits of cloud computing outweigh the risks. Cloud computing directly addresses a multitude of challenges enterprises face today. These are also the key reasons why business executives feel IT is not responsive enough to meet their needs. How many of these complaints have you heard in your company?
- "The IT environment is too large and complex"
- "Getting the functionality we want requires heavy customization"
- "Our IT department is unable to quickly implement changes to support the evolving needs of business"
- "Slowness of existing systems that do not meet user expectations"
- " Inability to consistently and effectively scale to support rapid growing requirements"
- "Complex rules to derive performance metrics"
- "Widening gap between available functionality and actual features used"
- "IT is unable to keeping pace with technology advances"
- "We can't find the talent to support new technology"
- "High operating costs, high capital costs"
The cloud does offer solutions to the gripes listed above, its actual effectiveness for enterprises lie in how they address the following key questions. Consider them carefully:
- What are the underlying drivers for tapping into the cloud? Is it for net new functionality/application or moving from an existing solution? How clearly are these defined and communicated to the project team?
- What business needs will the cloud solution serve?
- Will the cloud based solution work in isolation or work with other systems?
- Is the planned solution part of an established cloud platform?
- How many users will access the cloud? What training and support levels are required?
- What is the total lifecycle cost of the solution?
- Does the "pay-per-use" model enhance our cash flow? (this is your CFO's favorite question!)
The Process: Key Stages in Migrating to the Cloud
Although implementing a Cloud migration aimed at replacing an on premise major business application may seem at times a simple straight forward implementation, it is fraught with pit falls which may undermine the true value of the investment and in fact put enterprises in worst situation than before.
Understanding and planning for these pit falls is critical for a successful deployment of the solution. A well planned and executed cloud computing solution can not only provide needed functionality but can also offer an opportunity to improve processes that were supported directly or indirectly by legacy systems.
If IT is to be a partner with the business, business stakeholders must work closely with their IT counter parts and project team to:
- clearly state business objectives for the Cloud Migration
- define project scope of the Cloud Migration
- provide a set of guiding principles for all to follow
For simplicity's sake, we have broken down cloud migration process into three areas:
- Determine key business drivers
- Define business objectives
- Get executive sponsorship
- Set project guiding principles
- Form project team made up of IT and business representatives
- Develop project plan:
Define business requirements
Set key success metrics
Identify decision making authorities
- Execute the plan
- Stay away from "scope creep:" stay focused on original project scope; this becomes a challenge particularly in cases where a major legacy application with large users set is being replaced
- Remember to follow the guiding principles at all times
- Communicate to all stakeholders regularly (no surprises!)
- Train users
- Monitor adoption
- Track success metrics
- Stay away from scope creep (this one may well decide the success or failure of the project)
- Follow guiding principles
- Only implement changes based on quantifiable business need
Let's evaluate IT's dilemma: how can IT support the business when the business doesn't want IT support?
The situation in IT is not a new one. We've seen this before with the Internet and of course outsourcing. This time, IT needs to take the lessons it learned from those two instances and find a way to align itself with the business.
Here's how IT can become a true business partner:
- Adopt a service provider's mindset
Most IT departments don't exactly have
a passion for delivering quality customer service. And when it comes to agility, the cloud will eat your lunch. IT departments must provide a service catalog which includes cloud services - either through trusted third party cloud service providers, though their own private clouds, or even hybrid cloud-based solutions. What matters is business results. Even your IT infrastructure - servers, storage, etc. should be viewed as service offerings.
- Understand the financial drivers that matter to the CFO
An attention and understanding of the many intricate and interrelated details of service and support.
- Become the gatekeeper to the Cloud
It is IT's job to do the leg-work required
to evaluate the cloud services the businesses want. Create a joint business and IT team to evaluate the capabilities of cloud service providers. Check and verify all claims. Manage the SLAs and the relationships.
- Become a security and compliance partner
Evaluate and monitor you sevices - both internal and third-party - for infomation security and policy based compliance.
- Extend BSM to the Cloud
Since your service catalog will include cloud services, you'll have to monitor them using new cloud monitoring tools and APIs available from a new breed of systems management vendors. Your CMDB will include cloud-access devices and services.
- Increase responsiveness
IT is going to have to respond to the business user based on their schedule, not IT's. "Anytime, anywhere" also means anytime, anywhere support. The BSM angle on this is that while IT may not have to monitor the infrastucture of a cloud application, they will have to be inceasingly responsive to the end-user experience. The IT performance dashboard must include views of both cloud applications and internal IT applications.
- Strategic IT
IT's best days lie ahead of it, if it becomes a strategic partner with the business. A recent survey of over 2,500 CIOs worldwide reveals that visionary IT companies are engaged in the following strategic projects:
IT's job is to manage this turbulence and find new ways to create business value through innovation and optimization. The cloud is just one of the challenges ahead. By facing these challenges, and leading the way, IT can and must be a proactive business value creator. Anything less, and the future is not so bright.
CLOUD MIGRATION: A CASE STUDY
Migrating a large sales force from a legacy, on-premise Sales Force Automation (SFA) application to a cloud-based application
Company type: Large enterprise
Size of Sales Team: 1,500+ present in over 40 countries
State of the legacy SFA application: On premise application running for over ten years, extremely customized and integrated with other systems, high degree of user dissatisfaction and low adoption.
Key business challenges:
• System viewed as a productivity drag for sales
• Extremely low and inconsistent adoption rate
• System unable to effectively support the sales process
• Inability to provide a single global view of Sales
• System unable to provide quick support to changing business needs
• Sales teams in non-US locations frequently experienced slow response time from the application
• Management unable to get real time business metrics
• Inability to effectively integrate SFA systems of acquired businesses leading to disparate systems • Large number of support staff needed
• Systems had evolved into more of a sales operation system rather than a sales rep system
How did the company successfully deploy the cloud-based SFA solution in under thee months (a record time)?
The success of the project was driven by strong support from senior sales management, tight alignment between IT and business sponsors, clear understanding of business objectives for SFA- what it is and what it is not. There's a fine line between what the application means to a sales rep versus what it means to a sales manager. For a sales rep an SFA application is meant to be a true sales productivity tool, while for a sales manager it is a reporting or management tool. Keeping an optimum balance to support the two sides was critical for the success and adoption of the tool.
The success of the project was driven by the following factors:
• Strong executive sponsorship
• Leveraged out of the box functionality, and stayed away from modeling the new SFA to legacy SFA processes
• Managed scope vigorously
• Had committed project leads with known escalation paths
• Adopted a phased approach to meet the needs of various stakeholder groups
• Embraced best practice recommendations
• Engaged users in the process and joint application development
• Engaged training teams early in the process
Bottom line: While cloud based applications offer compelling value proposition, the return on investment is tightly linked to the implementation approach and the underlying business objectives. Enterprises can score big with their cloud based solution by keeping things simple, beginning with the end in mind and managing scope vigorously.
Martin Jones is a business operations executive at a leading technology company. He is writing a book based on his experience leading mission-critical, enterprise application migrations to the cloud.
Christian Sarkar is the managing editor of BSMReview.com.